Benefits of Home Improvement Loan
Last Updated : March 15, 2016, 10:41 a.m.
A home improvement loan is a good option of borrowing money for renovation and improvement work. Many borrowers apply for home loan to fix the maintenance and other renovation work of their homes. Investing money in home improvement and renovation is a good idea with long-term perspective. Taking a home improvement loan is thousand times better than borrowing a personal loan. This home improvement loan gives you many financial benefits and tax benefits. The upper limit of this loan is higher than personal loan. Gaining a secured loan is much better in long run. Here are some benefits and advantages of a secured home improvement loan.
Lower rate of interest: One of the biggest advantage of securing a home improvement loan is lower and fixed rate of interest. If you borrow personal loan, you need to pay higher interest rate. Besides, in home improvement loan you will pay a fixed rate of interest. If you calculate a lower interest rate on a higher amount for a longer period of time, you will save a big amount in long-term. When you are paying lower rate of interest for longer period, paying the loan amount becomes more easy and rewarding as well.
Lower EMI s: If you have borrowed the loan on a lower rate of interest for a longer period, your EMIs will be of lower amount. You will pay a lower EMI every months as compared to getting a loan on higher rate of interest. If you are a salaried person with limited source of income, getting a loan at a lower rate of interest with lowest EMI will be a boon for you. Therefore, getting a secured home loan is always the best option to stick to your monthly budget.
Lesser paper work: This kind of loan requires less paper work if you have already taken a home loan from the same bank. There are banks which will conduct physical verification of the property before approving the loan, but there are banks which will consider your previous loan history and documents with minimum paper work for disbursal of your home improvement loan with same bank.
But, if you are taking this loan for the first time, in such case you are required to go through all the process and procedure of applying for a loan and disbursal formalities.
Flexibility to use: You have taken the home improvement loan for renovation of your home. You can use it to extend one room or two in your home. Make a new balcony, or extend the covered area of your home. If you managed to save money from this renovation and extension work you can use this money for adding new cabinets in your room, or improving your kitchen doors and cabinets. This kind of secured loan offers you flexibility as well as freedom to use it for various improvement work.
More lender options: When you look forward to borrow a personal loan you have limited options or only a few lenders agree over offering you an unsecured loan if you fall under the lower salary bracket or you have a bad credit history. But, if you are taking a secured loan, more lenders will agree to lend you money for renovation work. You can get better loan amount as well as lower rate of interest with such kind of loans.